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interview

Nair Balan, EVP & CTO, Liberty Global: “OTT is not a threat. It is a complimentary service”

Nair Balan, EVP & CTO, Liberty Global is speaking on the topic of “Making the Digital Home a Reality for All” on Day Two of the Broadband World Forum 2012, taking place on the 16 – 18 October 2012 at the RAI Exhibition and Convention Centre, Amsterdam, the Netherlands. We catch up with him to gain his insights insight into the true nature of the OTT challenge and innovation in the broadband industry.

What were the big milestones for you in the last 12 months?

We have had a very good year so far, and our growth numbers show it. 2012 has been a record year for adding new subscribers. In addition, we are launching a number of new products this year as well. We have launched our SIP client for smartphones, our wifi platform, our OTT platform and also our next-generation in-home experience via a new gateway, called Horizon.

Where do you stand on bandwidth caps, line throttling and traffic management?

We don’t believe in throttling traffic based on the type of traffic being used. However, like any network provider, our engineers are constantly balancing the network to make sure that our users have the best possible experience. I do believe, that eventually, we will have pricing based on usage, just like mobile operators already do so today. This is already the case in a number of countries, and we continue to study it. No decision has been made on this so far internally.

We hear that networks are not being rolled out fast enough but also that customers do not want to pay for higher speeds? Is there actually a need for ultrafast broadband right now?

We are very aggressive in rolling out a superfast network. We were the first to get most of our footprint on DOCSIS 3.0. We do believe that consumers want higher speeds, and the data suggests that is the case. But I also agree that there will be a time when any additional speed will not make sense, as the bottleneck just moves from the last mile to the core, or to the inside LAN in the home, or to the device operating system. I believe that we will all be in a 100Mbps + average speed in a matter of a few years. And consumers will want that.

To what extend do you see OTT services as a threat?

OTT in itself is not a threat. It is a complimentary service, and we are participants in it. There should be no pricing arbitrage for content between an OTT provider and an operator. The real threat is in piracy or consumer tastes shifting from professionally produced content to amateur content or professional short clips. Right now there is no substitution for great content on TV. I actually think TV content is better than it has ever been.

What advantages do you see in cable over rival technology?

Cable is inherently superior to many other technologies, based on the physical plant, and the work done to manage data in the Layer 2. The usable spectrum is much higher than copper and the ability to transition to FTTH is much easier and at a much lower cost. However, based on a previous question, I think there will come a time when the network advantage of one over the other will be minimized, and both telcos and cable will differentiate themselves based on service and price.

Could you see 4G services affecting demand for fixed-line broadband?

4G services will boost the proliferation of smartphones and will increase the demand for fixed line as well. This is due to the fact that wifi will be the preferred PHY in the home, and multiple devices will be connecting to the cloud at the same time. The only way to satisfy this demand is through a fixed-line broadband.

Net neutrality has already been enshrined in law in the Netherlands. What’s your stance on this?

We support net neutrality, and feel it is a responsibility of ours as a Tier 1 provider to make sure that networks are neutral to the type of traffic that flows over them.

Is there enough innovation in the industry? If so, can you provide examples?

There is never enough innovation. Innovation is spurred by creativity and consumer wishes. But what really drives innovation is competition, and therefore you are now seeing more innovation in our industry than ever. The in-home experience of a consumer supported by a pay tv operator is going to change significantly over the next few years. Broadband speeds are going to increase dramatically. Voice services are going to be more integrated with other offerings, and a huge amount of social networking is going to be touching all your services.

What are the major challenges that you expect to face in the next few years?

Finding the right talent and managing the flow of new ideas to product realisation will be our biggest challenge. The other challenge is to transform our operations to support all these new services, so they can scale well and give our customers the great service they deserve.

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